Norwich Union Linked Life Assurance Ltd. v Mercantile Credit Company Ltd.

A court may refuse to entertain an interim application where, viewed in the context of the litigation as a whole, it would add cost or delay without proportionate procedural benefit. A lease need not contain an expressly stated requirement that an application for consent to underlet specify the proposed rent unless that term is necessary for the lease to operate effectively. A service issue should not be summarily determined where the facts make the legal effect of the communication reasonably arguable and suitable for trial. However, a short and self-contained point of law capable of disposing of the claim may properly be determined summarily.

The claimant appealed against a Deputy Master’s dismissal of its application under CPR Parts 3.4 and 24. The application concerned two pleaded defences to a claim arising from an alleged unreasonable delay in consenting to a proposed underletting.

The first defence alleged that the request was ineffective because it did not state the proposed rent. The second alleged that the request was not validly served for the purposes of the Landlord and Tenant Act 1988. The central issues were whether the court could decline to entertain the application under the overriding objective, whether the implied-term argument was legally unsustainable, and whether the service issue could be resolved without a trial.

1. The court was entitled, in principle, to refuse to consider an interim application where doing so would delay resolution, increase costs or consume court time without proportionate benefit to the conduct of the case. The overriding objective applies to the management of the litigation as a whole, not merely to the manner in which an application is heard.

2. The appeal was allowed concerning paragraph 6(a) of the Defence. The proviso to clause 3(26) gave the landlord a right to refuse consent if it was not satisfied about the rent, but it did not make specification of the proposed rent a necessary component of every request for consent. The lease worked perfectly well without such an implied requirement. Paragraph 6(a), and the consequential averment in paragraph 22(b), were struck out under CPR Parts 3.4 and 24.

3. The appeal was dismissed concerning paragraph 6(b). The evidence made it reasonably arguable that faxing the letter to the managing agents, marked for their information, was not itself service. The authority of the solicitors and the common-law principles concerning communication to agents raised factual and legal questions unsuitable for summary determination.

4. Nevertheless, the Defendant and its agents had treated the letter as an application for consent and acted upon it. Applying the purpose of section 23 of the Landlord and Tenant Act 1927, the Defendant had little prospect of establishing that the application was never served. The date on which service took effect, and therefore when any period of unreasonable delay began, remained matters for determination on the facts at trial.

5. The claimant’s specific-disclosure application remained properly before Master Bowman. It was not appropriate to transfer that part-heard application to the judge hearing the appeal.

• High Court (Chancery Division): The appeal from the Deputy Master’s order was allowed as to paragraph 6(a) of the Defence and dismissed as to paragraph 6(b). The application concerning specific disclosure remained before the Master.